Companies to gear up for climate change

Consumers and stakeholders are placing increased pressure on South African companies to act responsibly and address climate change.

Jayne Mammatt, an Associate Director in the Sustainability Division of Advisory Services at PwC, says: “Companies that are slow to react to consumer demands may find their reputations at risk. Business cannot afford to wait for the Government to implement laws. If business wants certainty, it will need to provide an input to the solution. Some degree of change is required and it is the responsibility of business to think about what a changing climate will mean for organisations, peoples’ health and their lifestyle.”

Mammatt admits that climate change is no longer viewed as an environmental issue – it is a core business risk. “The public’s perceptions about climate change and a company’s actions can affect its reputation and consumer demand for products”, she states

In an attempt to understand the effects of a changing climate, every business needs to undertake a risk assessment of its business model. “Companies need to assess the physical risks relating to climate change and how they affect the business and supply chain, including its operations.” Further from that, climate change should be placed high on the agenda of the board; it should be treated as an area of good corporate governance.

Recently, 258 of the world’s largest investors called on governments worldwide to amend climate change policies. This comes in the run up to the Climate Change Summit (COP 17) to be held in Durban later this month.

“Even if COP 17 comes to an agreement, there will still be a considerable period of time before the world’s governments turn policies into legislation that has a direct effect on consumers and companies”, says Mammatt.

Business should think about investing in climate change initiatives rather than wait for the Government to implement legislation. For instance, the retail sector should look at giving consumers sustainable products, as they are starting to opt for products that reduce pollution or waste and those that save energy and water.

The issue of sustainable consumption is increasingly demanding attention. “Companies must take innovative steps to reduce their greenhouse gas emissions,” says Mammatt. “The cost factor may initially be higher, but companies need to think about the value they will be getting in the long run for their brand.”

“A change in consumer and corporate behaviour will lead to lower emissions. If every company and individual plays a part, it can make a huge difference. This can be anything from reducing waste and recycling, to minimising electricity consumption,” she continues.

Many companies have realised that they can no longer operate in a manner that entails doing damage to the environment. This is because they have been forced to realise that most of the damage will have an effect on generations to come.

“Despite a lack of clarity from policymakers, business needs to take the lead and provide a solution to the impending challenges,” concludes Mammatt.